Opposition Brief — Inexco Oil Co. v. United States Department of Energy

~»

No. 85-922 —/

Supreme Court, U.S.

FILED

FEB $8 1986

CLERK

JOSEPH F. SPANIOL, JR

Sn the Supreme Court of the Rnited States

OCTOBER TERM, 1985

INEXCO O1L COMPANY, PETITIONER

V.

7

UNITED STATES DEPARTMENT OF ENERGY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

a

THE TEMPORARY EMERGENCY COURT OF APPEALS OF

THE UNITED STATES

MEMORANDUM FOR THE RESPONDENTS

IN OPPOSITION

CHARLES FRIED

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

THEODORE A. MILES

Principal Deputy Solicitor

CHARLES L. Cope Il

RODNEY L. SOLENBERGER

Assistant Solicitors

Economic Regulatory Administration

Department of Energy

Washington, D.C. 20585

TABLE OF AUTHORITIES

Cases:

Atlantic Richfield Co. v. DOE,

PN os oc aucnawwdnnadareas

Bray v. United States, 423 U.S. 73 ........

Camp v. Pitts, 411 U.S. 138 .........00..

DOE vy. Brett, 659 F.2d 154,

cert. denied, 456 U.S. 936 ..............

DOE v. Crocker, 629 F.2d 1341 ..........

DOE v. Osborn, 760 F.2d 282 ...........

Grigsby v. DOE, 585 F.2d 1069,

cert. denied, 440 U.S. 508 ..............

Mountain Fuel Supply Co. v. DOE,

oo ere ts cee re ere

Pennzoil Co. v. DOE, 680 F.2d 156,

cert. dismissed, 459 U.S. 1190 ..........

United States v. Carlo Bianchi & Co.,

ge Garr re ree ye ee re eee

United States v. Texas Energy Petroleum

oS Se OF eee

United States v. Uni Oil, Inc.,

646 F.2d 946, cert. denied, 455 U.S.

Ar ea ee a ee ee

United States v. Zang, 645 F.2d 999,

cert..denied, 454 U.S. 864 ..............

(1)

I]

Page

Statutes and regulation:

Department of Energy Organization Act,

Tit. V, 42 U.S.C. 7191 et seq. :

§ 502, 42 U.S.C. 7192 0c cece cece ee ceenees 5

§ 503, 42 U.S.C. 7193 0... ccc cece en veecsees 5

Economic Stabilization Act of 1970,

12 U.S.C. (1976 ed.) 1904 note ........-..0.. 3

§ 211(d)(1), 12 U.S.C. (1976 ed.)

1904 MOU scan cecaccnrnueenbeeeverewers 7

Emergency Petroleum Allocation Act of 1973,

15 U.S.C. (1976 ed.) 751 ef Seq. wc. wsccesccess 3

§ 5(a)(1), 15 U.S.C. (1976 ed.)

tpt) 8) ere ewer re ree Se rere es 7

Freedom of Information Act, 5 U.S.C. 552 ...... 5

18 U.S.C. 4B). vccunsins ssaweu ea eeeeeeeeeeees 4

18 U.S.C. GB vcs iia eee eee 5

18 U.S.C. US nina ti tenes tee ee 5

18 U.S.C. 1563 ... vaccines deseee eee eee eeeeeee 5

18 U.S.C. FOG2 cc ccenccaaseeeeee eee 5

10 C.F.R. 212. FR). 5 ikivsvseceuwens ses eeeeenee 2

Inu the Supreme Court of the Hnited States

OCTOBER TERM, 1985

No. 85-922

INEXCO OIL COMPANY, PETITIONER

Vv.

UNITED STATES DEPARTMENT OF ENERGY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE TEMPORARY EMERGENCY COURT OF APPEALS OF

THE UNITED STATES

a

— a “——

MEMORANDUM FOR THE RESPONDENTS

IN OPPOSITION

Petitioner challenges the decision of the Temporary

Emergency Court of Appeals, which issued a writ of man-

damus directing the district court to vacate a document

production order. Petitioner contends that the court of

appeals lacked jurisdiction to issue the writ of mandamus

and misapplied the doctrine of res judicata by ruling that

three prior decisions approving the Department of Energy’s

interpretation of a regulation barred petitioner from chal-

lenging that interpretation.

1. In 1979, the Department of Energy (DOE)! issued a

Proposed Remedial Order requiring petitioner to make

'We use the term DOE to refer to the Department of Energy as well as

to its predecessor agencies. The various agencies are set forth in Penn-

zoil Co. v. DOE, 680 F.2d 156, 161 & n.6(Temp. Emer. Ct. App. 1982),

cert. dismissed, 459 U.S. 1190 (1983)

(1)

y

restitution of nearly $100,000 plus interest tor overcharges

resulting from crude oil sales in violation of the then-

effective price regulations. Pet. App. A2. Petitioner chal-

lenged the Proposed Remedial Order before DOE’s adjudi-

catory arm, the Office of Hearings and Appeals (OHA), and

sought discovery of internal DOE documents construing

the regulatory term “posted price” (see 10 C.F.R. 212.73(b)

(1974)), which OHA denied as irrelevant. Pet. App. A2-A3.

After OHA adopted the Proposed Remedial Order as a

Remedial Order, petitioner appealed to the Federal Energy

Regulatory Commission (FERC). Petitioner initially de-

clined to request discovery in that proceeding, but sub-

sequently moved to discover documents similar to those

sought in the prior proceeding. FERC denied petitioner’s

motion on the ground that it was untimely, and, after

further briefing and argument, FERC affirmed the Reme-

dial Order. /d. at A3.

Petitioner then sought review in the United States Dis-

trict Court for the District of Wyoming challenging, inter

alia, the agency’s interpretation of the regulatory term

“posted price,” upon which the Remedial Order is based.

Pet. App. A3. Petitioner sought to discover internal DOE

documents discussing or applying the “posted price” term.

The magistrate ordered DOE to produce all the requested

documents and denied DOE’s motion for a protective

order. /bid. In response, the agency produced 165 docu-

ments and withheld 63 documents subject to the predeci-

sional, deliberative process privilege. The magistrate

granted petitioner’s motion for an order compelling dis-

covery of the withheld documents. /bid.

DOE appealed the magistrate’s order to the district court,

which reviewed the disputed documents in camera and

ordered DOE to produce all of the documents (Pet. App.

A3-A4). The court ruled that several documents should

have been included in the administrative record, that the

3

deliberative process privilege did not apply to any of the

remaining documents, and that, even if the privilege was

applicable, petitioner’s need for the documents to challenge

the agency’s construction and application of its regulations

outweighed the government’s interest in non-disclosure (id.

at A4, B21). DOE sought a stay of the order and a writ of

mandamus from the Temporary Emergency Court of

Appeals. The court of appeals granted a stay pending dis-

position of the petition for writ of mandamus. /bid.

On October 2, 1985, the court of appeals issued a writ of

mandamus ordering the district court to vacate its order

compelling production of the disputed documents (Pet.

App. Al-A9). The court first held that it had jurisdiction to

adjudicate the issues presented by the petition, on the

ground that the district court’s ruling that the sought-after

documents were relevant raised an issue under the Emer-

gency Petroleum Allocation Act of 1973, 15 U.S.C. (1976

ed.) 751 et seq. (Pet. App. A4-A6). On the merits, the court

held that the documents were irrelevant to any issue before

the district court and that mandamus was the appropriate

remedy in this case (id. at A7-A9). |

2. The decision of the court of appeals is correct, does

not conflict with any decision of this Court or of any other

court of appeals, and presents no significant legal issue.

Accordingly, review by this Court is not warranted.

a. Petitioner argues (Pet. 5-12) that the court of appeals

lacked jurisdiction to entertain the DOE’s mandamus peti-

tion. That claim is insubstantial. The limited jurisdiction of

the Temporary Emergency Court of Appeals extends only

to the resolution of issues arising under the Economic Sta-

bilization Act of 1970 (ESA), 12 U.S.C. (1976 ed.) 1904

note, the Emergency Petroleurn Allocation Act of 1973

(EPAA), IS U.S.C. (1976 ed.) 751 et seqg., and the regula-

tions promulgated under these statutes. The underlying

4

action between petitioner and DOE challenges a DOI!

remedial order over which the [Temporary Emergency

Court of Appeals clearly has exclusive appellate jurisdic-

tion. That court has repeatedly heid that its jurisdiction to

review such issues necessarily includes review of district

court discovery orders that compel disclosure of privileged

information related to ESA and EPAA claims. See, e.z.,

DOE vy. Brett, 659 F.2d 154(Temp. Emer. Ct. App. 1981),

cert. denied, 456 U.S. 936 (1982). As the court explained

(Pet. App. A4-A5), a district court’s ruling that certain

evidence is relevant to DOE’s construction of the EPAA

“necessarily involves an adjudication of an EPAA issue.”

See, e.g., DOE v. Crocker, 629 F.2d 1341, 1344 (Temp.

Emer. Ct. App. 1980). Accordingly, the district court’s rul-

ing (Pet. App. B21, C2) that petitioner needed the privileged

documents to support its challenge to the validity and con-

sistency of DOE’s interpretation of its EPAA regulations

presented an issue over which the court of appeals had

jurisdiction. /d. at AS.

Petitioner's reliance (Pet. 5-8) on Bray vy. United States,

423 U.S. 73 (1975), is misplaced. There, a party refused to

comply with a subpoena requiring the production of docu-

ments necessary for an investigation into possible violations

of the ESA, and the government initiated criminal con-

tempt proceedings under 18 U.S.C. 401. This Court held

that the Temporary Emergency Court of Appeals lacked

jurisdiction over an appeal from that party’s contempt con-

viction, on the ground that the defendant’s “refusal to obey

a lawful order * * * initiated ‘a separate and independent

proceeding at law for criminal contempt, to vindicate the

authority of the court’ and was ‘not a part of the original

cause’ ” (423 U.S. at 75 (citations omitted)). Here, by

contrast, no “separate and independent proceeding” was

commenced. nor did DOF “seek review of a criminal!

viction” (Pet. App. A6). Bra) therefore has no bearing on

x

this case.‘

Indeed, any other result would make no sense. For

example, if DOE had refused to produce the privileged

documents and the district court granted judgment for peti-

tioner as a sanction, the Temporary Emergency Court of

Appeals unquestionably would have exclusive appellate

jurisdiction over an appeal from that judgment. By the same

Petitioner errs in claiming (Pet. 11) that the discovery order turns

entirely upon an application of the deliberative process privilege with-

out regard to the issues raised in the underlying action. In the first place,

the court of appeals held that the documents were irrelevant and did not

address the privilege issue petitioner raises in this Court (Pet. App

A8-A9). Moreover, the disclosure order was based on the district

court's finding that petitioner needed the documents to establish a

defense to DOE's remedial order, which is premised on an EPAA

regulation. Pet. App. B21, C2

Nor does the ruling here conflict with any of the decisions cited by

petitioner (Pet. 8, 10). Each of those cases involved statutes other than

the EPAA and raised no issue under that statute (or the ESA). See

Atlantic Richfield Co. v. DOE, 769 F.2d 771, 778-780(D.C. Cir. 1984)

(review of the scope of Secretary of Energy's authority pursuant to

Section 503 of the Department of Energy Organization Act, 42 U.S.C

7193); United States v. Texas Energy Petroleum Corp., 719 F.2d 394,

398 (Temp. Emer. Ct. App. 1983) (severable counterclaim filed pur-

suant to the Freedom of Information Act, 5 U.S.C. 552); United States

v. Uni Oil, Inc., 646 F.2d 946, 949-952 (Sth Cir. 1981), cert. demied, 455

U.S. 908 (1982) (criminal prosecution for violations of 18 U.S.C. 1001,

1341, 1343 and 1962); Texaco, Inc. v. DOE, 616 F.2d 1193 (Temp.

Emer. Ct. App. 1979) (adjudication of administrative action arising

under Section 502 of the Department of Energy Organization Act, 42

U.S.C, 7192).

Finally, petitioner's speculation (Pet. 11) that the court's decision ts

“potentially insidious” because it allows a defendant in a criminal case

to vest jurisdiction in the Temporary Emergency Court of Appeals by

seeking interlocutory mandamus review is belied by that court’s own

decisions. See, e.g., United States vy. Zang, 645 F.2d 999, cert. denied

454 U.S. 864 (1981)

6

token, if the district court had denied petitioner's discovery

request and entered judgment for DOE, petitioner's appeal

would lie only in the Temporary Emergency Court of

Appeals. Yet both appeals would raise precisely the same

discovery issue presented here. Therefore, it is under peti-

tioner’s argument that “appellate jurisdiction * * * will turn

on the procedural vehicle chosen to obtain review” (Pet.

11).

b. The court of appeals also properly exercised its

authority in issuing a writ of mandamus. The Temporary

Emergency Court of Appeals would have exclusive juris-

diction over an appeal by DOE from a judgment in peti-

tioner’s favor holding that DOE’s construction of its regula-

tions was irrational. However, given the court of appeals’

three prior decisions to the contrary,’ mandamus was an

appropriate means of entorcing the court’s prior rulings,

which make the documents petitioner sought irrelevant as a

matter of law

Petitioner errs in contending (Pet. ! 2-15) that the court of

appeals relied on its prior decisions to foreclose petitioner's

suit in this case. The decision below does not prevent peti-

tioner from arguing that DOE's actions were not supported

by substantial evidence or that the agency improperly ap-

plied its regulations in petitioner’s case. The court ol

appeals simply held, on the strength of its prior rulings, that

the documents petitioner sought were irrelevant because the

agency's construction of its regulations was valid. Thatisa

legal issue as to which discovery ts irrelevant

Additionally, because all of these documents are predeci-

sional and since none ts in the administrative record, which

petitioner in part compiled, they may not be considered by

See DOF \v. Osborn, 760 b 2d 282 (1984). Mountain Fuel Suppl)

( DO 656 kod 690 CI9ORIT): Gries! \ DOk. SRS 2d 1069

197% ert. demed. 440 | So SOK (1979

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( HARLES | Cope I]

RODNEY L. SOLENBERGER

issisiant Solicitors

Economic Regulatory Admuinisiratior

Department of Enere\

FEBRUARY I9R6

‘} SA Section 2| (dv) \2 LU SN (1976 ed.) 1904 not which is

incorporated by reference by EPAA Section Wakil) 1S U.S.C. (1976

ed.) 754(a\1), provides in relevant part

|N}o order of such agency shall be enjoined or set aside, in whok

or in part, unless a tinal pudgment determines that such ord

‘ | the awwencyv sa thority 7 . hased ron ’ | nes hic?

if Supported fh stantial eviden

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